Medicaid’s Coverage of Nursing Home Care

For better and for worse, Medicaid (Medical Assistance in Maryland) is the primary method of paying for nursing home care in the United States. But navigating the Medicaid system is complicated and confusing. Here are the basics. 

Medicaid is a joint federal-state program that provides health insurance coverage to low-income children, seniors, and people with disabilities. In addition, it covers long-term care for those who qualify. This coverage is in a nursing home.

Medicaid has become the default nursing home insurance of the middle class. Lacking access to alternatives such as paying privately or being covered by a long-term care insurance policy, most people pay out of their own pockets for long-term care until they become eligible for Medicaid. 

Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive federal money, which pays for about half the state’s Medicaid costs. (The state picks up the rest of the tab.) This complicates matters, since the Medicaid eligibility rules are somewhat different from state to state and they keep changing.

While the majority of nursing homes accept Medicaid patients, there are some that do not.

To qualify for coverage, applicants must have limited assets and income. You typically cannot have more than $2,500 in assets. To lower your assets, you need to spend them down by paying for things that benefit the Medicaid applicant. You cannot simply give away your resources in order to qualify for Medicaid. Income limits vary by state. In Maryland, your monthly income must be less than the monthly cost of the nursing home

In addition to the strict income and asset limits, you must meet level of care requirements in order to qualify for nursing home coverage. The state looks at an applicants’ functional, medical, and cognitive abilities to determine if they need care in a nursing home. You are usually determined to need long-term care if you need help with two or more activities of daily living (such as bathing, dressing, eating, moving, and going to the bathroom). But to need a nursing home level of care, you may also need frequent medical care, such as assistance with medication, injections, IVs, or other medical treatment. The state may also consider your cognitive abilities—i.e., whether you have the ability to make decisions on your own. 

In addition to nursing home care, Medicaid may cover some home care services or in limited circumstances care in an assisted living. Home care is typically provided through home- and community-based services “waiver” programs to individuals who need a high level of care, but who would like to remain at home.

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David Wingate is an estate planning and elder law attorney at Estate and Elder Planning by David Wingate. The Estate and Elder Planning office services clients with powers of attorneys, living wills, Wills, Trusts, Medicaid and asset protection. The Elder Law office has locations in Frederick, Washington and Montgomery Counties, Maryland.

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